Hi-tech renaissance – driving a financial revolution?

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Having started out in tech PR in the late 90s I’m just about old enough to remember the brief highs of the first dotcom bubble and the great wave of IPOs and tech investment, prior to the spectacular bursting of that bubble by the end of 2000.

As a lowly Junior Account Executive, I recall being involved in the launch of “Heroes.Com: The Names and Faces Behind The.Com Era” a book by Sun Microsystem’s then Global Marcoms Director, Louise Proddow (now trading on Amazon for £0.01p if you’re interested).

A book that seemed so relevant and exciting at the time soon became forgotten and I wonder how many of those names and companies heralded in this book are still a success today? Certainly one of them, Boo.com is a story best forgotten, but then there’s Amazon and eBay whose success speaks for itself.

What characterised the first dotcom bubble for me was the power of the banks in both fuelling the boom and creating the bust, by the setting of demanding short-term financial targets that were ultimately unachievable given the pioneering nature of many of these businesses.

I was therefore very interested to read New Electronics editor, Neil Tyler’s leader in the 28th April 2015 print issue of the magazine. In it he talks about the hi-tech renaissance in the US where tech companies appear to be seizing the mantle of ‘money makers’ from the investment banks, to the point that he questions whether we’re seeing a shift in the balance of power between the two. He cites the fact that the likes of Google and Twitter are now attracting top talent from Morgan Stanley and Goldman Sachs – something that would be unheard of five years ago.

Tech innovation in areas such as the IoT is throwing up a host of new technologies and companies with investors seemingly keen to pour money into the tech sector. So what’s different this time around?

Banks and hedge funds are far more cautious about where they lend

There are many new private investors with money to invest, motivated by low interest rates they’re getting on their savings

The rise of crowd-funding investment platforms like Kickstarter, Indiegogo and RocketHub

More and more start-up companies are refusing to cede control to the banks, as would have been the case just a few years ago

Many start-ups are refusing to allow their focus on innovation to be undermined by demanding short-term financial targets. Control is staying with company founders

So what about the UK? Is the same thing happening here?

The answer… not quite! We’ve still got our start-up/innovation hotspots – like Cambridge, Shoreditch, Bristol and increasingly places like Sheffield – but most UK companies still have to operate within traditional financing structures. Change is happening in the form of innovative financial hubs and loan programmes for start-ups but as is so often the case, it’s not happening quick enough.

So, as Neil concludes, wouldn’t it be something if in the middle of this lacklustre General Election, politicians stopped talking about austerity and began to focus on how the UK could look to the future and how it could fund and encourage the next generation of hi-tech companies?

Chris’s extensive experience of agency PR, ‘can-do’ attitude and track record for achieving outstanding results time after time make him a firm favourite amongst clients. His PR degree and natural teaching skills makes him a popular team leader and an expert mentor.